When criminals try to hide or disguise the source of their
illegal money by converting it to funds that appear
legitimate, the process is called “money laundering.”

Every year, money launderers try to cover up the illegal
source of their money by funneling hundreds of millions
of dollars through financial institutions, including money
services businesses (MSBs).

Money laundering is most likely to be successful when
criminals avoid leaving a “paper trail” of transactions
linking the money back to their crime. Law enforcement
can follow the “paper trail” created from reports and
records of financial institutions.

By following federal recordkeeping and reporting
requirements, you can help law enforcement prevent
criminals from getting away with – and profiting from –
their crimes.

For more information about reporting suspicious activity,
please visit www.msb.gov.

Designing a transaction to evade triggering a reporting
or recordkeeping requirement is called “structuring.”
Structuring is a federal crime, and must be reported by
filing a Suspicious Activity Report (SAR).

Examples

1. A customer breaks a large transaction into two or
more smaller transactions.

A man wants to conduct a transaction involving
$12,000 in cash. However, knowing that the cash
threshold of more than $10,000 for filing a CTR
would be met, he conducts two cash transactions
of $6,000 each.

2. A large transaction is broken into two or more smaller
transactions conducted by two or more people.

A woman wants to send a $5,000 money transfer,
but knowing that the threshold of $3,000 or more for
recording of funds transfers would be met, she sends
a $2,500 money transfer and asks her friend to send
a $2,500 money transfer.

Red Flags

There are a number of possible factors, or “red flags,”
which signal that an activity or transaction might be
suspicious. Observing a “red flag” should trigger some
questions, such as:

Is the amount of the transaction unusually large for the typical customer or for the MSB?

Does the customer make the same or similar transactions more frequently than normal?

Does the type of transaction seem unusual for the customer or the MSB?

Examples

Customer uses fake ID.

Two or more customers use similar IDs.

Customer changes a transaction after learning that he or she must show ID.

Customer conducts transactions so that they fall just below amounts that require reporting or recordkeeping.

Two or more customers, trying to evade BSA requirements, seem to be working together to break one transaction into two or more transactions.

Customer, trying to evade BSA requirements, uses two or more MSB locations or cashiers on the same day to break one transaction into smaller transactions.

If a customer does something obviously criminal – such as
offering a bribe or even admitting to a crime – the law
requires you to file a SAR if it involves or aggregates
funds or other assets of $2,000 or more.

Remember…

Deadline. You have 30 calendar days to file a SAR after becoming aware of any suspicious transaction or pattern of suspicious transactions or activities that are required to be reported.

Liability. When you report suspicious activity, the law protects you from civil liability.

Your Role. You are not being asked to accuse customers of criminal activity – you are only required to file a SAR if you believe the activity is suspicious and involves $2,000 or more.

Urgency. If a situation seems to require immediate attention, contact the appropriate law enforcement authority right away; then file a SAR.

Confidentiality. It is illegal to tell any person involved in the transaction that a SAR has been filed.

Suspicious Activity Reporting Requirements

Certain money services businesses – businesses that
provide money transfers or currency dealing or exchange;
or businesses that issue, sell, or redeem money orders or
traveler’s checks – must report suspicious activity
involving any transaction or pattern of transactions at or
above a certain amount:

$2,000 or more;

$5,000 or more for issuers reviewing clearance records.

You have 30 calendar days to file a SAR after becoming
aware of any suspicious transaction that is required to
be reported.

How to Report Suspicious Activity

1. Record relevant information on a Suspicious Activity
Report by MSB (SAR-MSB) form available at
www.msb.gov or by calling the IRS Forms Distribution
Center: 1-800-829-3676.
2. Submit completed SAR to:Detroit Computing CenterAttn: SAR-MSBP.O. Box 33117Detroit, MI 48232-5980.
3. Keep a copy of the report and any supporting
documentation for 5 years from the date of filing
the report.